The roots of Labor’s crisis

Julia
Gillard
’s purge of
Kevin Rudd
supporters has exposed Labor’s existential crisis as more than mirroring the fiscal crisis of the social democratic welfare state in most other developed countries. Instead, it reflects a modern perversion of Australia’s traditional labour-market culture, traditions and institutions.

Prime ministers normally would claim to be governing for all the people. But Ms Gillard’s declaration to last month’s Australian Workers Union conference that she heads a “Labor" government rather than a social democrat or progressive party, and her rhetorical assault on foreign workers, narrowed the interests she represents to a trade union movement in structural decline. Over the past two decades, trade-union membership has slumped from more than 40 per cent of the workforce to 18 per cent, and only 13 per cent in the private sector.

AWU boss
Paul Howes
recognises the irony that this decline was facilitated by the Hawke-Keating government’s response to the economic crisis of the mid-1980s that was mostly supported by union leaders of the time. These include the two most senior victims of Ms Gillard’s anti-Rudd purge, former ACTU presidents
Martin Ferguson
and
Simon Crean
.

The paradox is that trade-union influence has increased even as the unions’ share of the job market has plummeted amid the rise of a more prosperous “aspirational" workforce. This increased influence has been achieved primarily through the unions’ organisational control of the Labor Party and the apparatus of workplace regulation.

Walking triumphantly into Thursday’s caucus meeting, Ms Gillard was flanked by
Wayne Swan
and
Yvette D’Arth
, both representatives of the AWU, which helped orchestrate her 2010 coup. The trade unions finance the party, select and supply its parliamentarians and exercise veto power over any party leader, such as Mr Rudd, who would challenge their interests.

Even former ACTU president
Bob Hawke
complains that the unions are almost “suffocating" Labor. As trade-union influence has become less ideological after the end of the Cold War, it has become more concerned with patronage and power. The draining of meaning has left the party more exposed to external infection, such as
Eddie Obeid
in NSW, and the internal Health Services Union scandal.

As a former industrial lawyer, Ms Gillard has reasserted the workplace regulation that legally privileges Labor’s union paymasters. So-called award modernisation aims to reinforce the pro-union regulatory framework that threatened to wither on the vine under John Howard. The latest Fair Work Act amendments by Workplace Relations Minister and former AWU boss
Bill Shorten
provide the unions with further institutional privilege and re-empower the former Arbitration Commission to reduce managerial prerogative.

As former ACTU vice-president
Anna Booth
has written, Australia’s industrial relations system remains an exercise in institutionalised conflict. Rooted in the class divisions of the 1890s depression, the unions assert that a fundamental power imbalance between labour and capital demands redistribution of a “fair share" to workers. They persist even though technological change, mass affluence, a shareholder democracy and fundamental social change have made them redundant and even counterproductive.

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Workers now even own the means of production. Yet the unions have made occupational superannuation an “industrial" issue to be regulated through politicised workplace institutions. By default, the award system siphons the retirement savings of millions of non-union workers into union-dominated funds. Mr Shorten insists that calls to require more non-union trustees on industry funds are “ideological" even though they come from the Labor-commissioned Cooper review.

Mr Ferguson and Mr Crean now call for an end to Gillard Labor’s class-warfare rhetoric and a return to the reformism of Hawke-Keating Labor. They want Labor to govern in the national interest rather than to serve a perversity of Labor’s traditional purpose that no longer represents the needs of working Australians.